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First Home 4 programme's 12 participating banks to give 1.4 bln euros in credit

The 12 banks to participate in the First Home 4 programme will be able to extend credit of 1.4 billion euros, said Aurel Saramet, the chairman of the National SME Credit Guarantee Fund on the occasion of the signing of the first contract under the programme at the Romanian Commercial Bank (BCR) on Friday.

'Four banks have already signed the protocol for the First Home 4 and they can give loans. We speak about BCR, CEC, Alpha Bank and BRD. We'll sign protocols for this programme with another eight banks. The total value of the credit that can be extended stands at 1.4 billion euros, of which 700 million euros is guaranteed by the Fund, with the overall amount available under the programme standing at 1.6 billion euros', Saramet said.

It is only Raiffeisen Bank that has not subscribed to the 4th edition of the programme out of all the big banks operating in the Romanian market.

More than 40,000 loans have been given up until now for homes via the First Home programme but, Saramet said, only 3 percent of such lending has been granted for building a new home.

Qualifying for the First Home 4 programme are individuals that do not exclusively own, alone or jointly with the spouse, another home, irrespective of how and when the home was acquired, as well as those who exclusively own, alone or jointly with the spouse, a home that was not acquired under the previous editions of the programme but which useful area is smaller than 50 square metres.

The Government, at the end of this March, passed an urgent decree establishing it will share the guarantees for the credit for buying a house via the First Home programme with the banks, so that the total cap of the offered guarantees should be increased. The guarantee will be shared between the state and the bank at an equal 50 percent to 50 percent.

The contracts currently under way will not be modified following the change of the First Home programme, but the banks will take over half the mortgages on the houses purchased under the programme from the state, Agerpres reports.